The Bats ECN, which has captured around 10% of Nasdaq-listed shares on its low-price electronic trading platform, is now offering trading in Nyse-listed securities.
In a statement Kansas City-based Bats says it will trade Nyse-listed stocks for the same fees it charges for Nasdaq-listed stocks. Currently the company makes around two cents profit on every 100 shares traded.
For January the company launched a more aggressive pricing model whereby it charged $0.0020 per share for removing liquidity or routing to other market centres, and rebated $0.0030 per share for adding liquidity in stocks priced above $1.
The new fee schedule loses Bats $0.001 for every trade, at an estimated cost of $6 million over January. But the campaign appears to have worked as on 31 January 2007, Bats traded a record 332 million shares of Nasdaq-listed stocks. The ECN says it has handled more than 13% of the average daily trading volume of Nasdaq-listed stocks during each of the past seven trading days.
The ECN is now extending its pricing model to Nyse-listed stocks "in response to client demand".
But Bats CEO Dave Cummings is asking subscribers "to ramp up slowly over the next several days" to make sure the electronic dealing system works as intended.
He says the ECN has been using the National Stock Exchange's predecessor platform for Tape B trading, although he expects Type A to work in the same fashion.
Bats was established in 2005 by Cummings, who is the founder of automated liquidity provider Tradebot Systems. The ECN, which is designed to handle high-speed, high-volume and anonymous algorithmic trading for broker-dealers, launched in January 2006. Since then a number of banks have invested in the system including Morgan Stanley, Credit Suisse and Lehman Brothers.